Fast-casual and fast-food dining chains have had a challenging year, with another beloved wing joint being added to the list of casual eateries that have had to close many locations.
Hooters, the American restaurant chain known for its wings and waitresses, has recently announced the closure of approximately 40 of its stores. According to the company, this decision was made due to market conditions and the underperformance of some of its locations. The affected stores are located in states such as Alabama, Georgia, Kentucky, Florida, Texas, Virginia, and more.
Hooters is shifting its attention towards boosting the sales of its frozen products, which will now be available in grocery stores. The move is similar to Red Lobster’s strategy of offering its popular Cheddar Bay biscuits for home consumption. It remains to be seen whether Hooters wings will be a hit in the grocery market, but the chain restaurant is willing to take the risk.
Some may argue that the focus on food quality has replaced the objectification of servers in the restaurant industry. Nonetheless, the reality remains that the cost of dining out has caused a shift in market conditions, leading many Americans to opt for home-cooked meals.
When it comes to choosing between fast food and local independent restaurants, the decision is quite clear if the prices and wait times are similar. However, several dining chains have faced significant closures recently.
1. Boston Market
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For quite some time now, Boston Market has been facing numerous challenges, including lawsuits, unpaid bills, and the closure of several restaurants. It’s owner, Jay Pandya, has had to file for personal bankruptcy twice due to the chain’s ongoing struggles.
At the start of 2023, Boston Market boasted an impressive 300 locations. Unfortunately, due to evictions stemming from unpaid bills and government shutdowns resulting from unpaid sales taxes, the chain was forced to close numerous locations. Presently, there are only 27 Boston Market restaurants operating.
Boston Market may not survive beyond 2024 unless significant changes are made to the company’s operations and performance.
2. Hardee’s
In 2023, Summit Restaurant Holdings, a significant franchisee of Hardee’s restaurants, shut down 39 of its restaurants and subsequently filed for Chapter 11 bankruptcy.
In January, 2024, Hardee’s faced a series of closures in Illinois, raising questions about the future of the fast food chain. It remains to be seen if this marks the end of their troubles.
3. Burger King
In 2023, Burger King had to shut down a significant number of its stores due to a series of setbacks. As many as three franchisees filed for bankruptcy, and several other outlets were closed down because they were not generating enough profits. As a result, the fast-food giant had to make the tough decision to close down hundreds of its outlets.
Executives are optimistic that Burger King has moved past the unfortunate events in its history. The company is now focusing on reinvesting $400 million into marketing efforts and remodeling its stores.
It remains to be seen whether the restaurant chain will be able to slow down the rate of closures in 2024. We can only hope for the best.
4. Krystal
For a while now, Krystal has been facing some difficulties. In fact, the burger chain had to declare bankruptcy in 2020. However, things took a turn when Fortress Investment Group stepped in and acquired Krystal, bringing it under the umbrella of SPB Hospitality.
Krystal restaurants experienced a 21% decline in numbers over the past five years, with the decrease expected to continue until the end of 2022.
Krystal’s strategy for expansion includes selling its corporately owned stores to multi-unit franchise operators. This approach is similar to what Jack in the Box is doing.
5. White Castle
White Castle, being one of the oldest American burger chains, is not immune to the issues faced by newer establishments. Despite offering great food, the chain still encountered legal trouble when it was sued for violations of biometric privacy laws.
White Castle is facing a colossal judgment of $17 billion for unlawfully scanning its employees’ fingerprints without their consent. Many media outlets have raised concerns that such a ruling could potentially put the future of this well-established restaurant chain in jeopardy.
6. Steak ‘n’ Shake
As of 2023, Steak ‘n’ Shake, which had 626 locations in 2018, has seen a decline in the number of its outlets to less than 500. This trend is alarming, especially since the sales have been increasing.
Biglari Holdings saved Steak ‘n’ Shake from bankruptcy in 2021 by stepping in just in time. The investment group revamped the brand, transforming it from a family dining establishment into a counter-serve and drive-thru restaurant.
In 2023, the pace of the overhaul decelerated significantly, as only two restaurants underwent the conversion process.
Steak ‘n’ Shake enthusiasts are feeling uneasy about what the future holds with this recent alteration.
7. Bagger Dave’s
Since 2015, Bagger Dave’s Burger Tavern has been shutting down its locations. Even though it didn’t have the same reach as fast-food giants such as McDonald’s or Wendy’s, it once had 26 establishments scattered across Michigan, Indiana, and Ohio.
Currently, the figure has dwindled to only six.
BT Brands, with a 40% stake in the company, declared in a press release that it intends to convert the current restaurants into fresh concepts by the end of 2024. This means that the Bagger Dave’s we are familiar with may no longer exist.
Bottom line
Restaurants bore the brunt of the COVID-19 pandemic, and unfortunately, not all of them survived unharmed. Despite the easing of the crisis, a lot of restaurants are still grappling with financial difficulties.
In 2024, the fast-food industry may face a multitude of issues including decreased traffic and sales, elevated prices, and customers reducing their spending on quick meals. These factors could potentially lead to trouble for the industry.
You may find some solace in the fact that these closures could provide you with an opportunity to cook at home and save some money. However, it’s always sad to witness the disappearance of a beloved restaurant.
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